More considering pensions opt-out

Workers in LondonMore private sector workers who do not currently have a pension are planning to opt out of Government reforms to place them in a scheme than those who are sure they will stay in, a report suggests.

Around one third (37%) of some 4,000 employees questioned by Aviva said they will opt out after they are automatically enrolled into a workplace pension.

While this share is broadly unchanged since similar research was carried out last May, the proportion of people who are certain they will stay in their employer's scheme has shrunk to 36%, from 43% last year.

Awareness about auto-enrolment has generally increased, but rising numbers of workers are undecided whether to stay in the pension they are enrolled into or opt out, with almost three in 10 people saying this, compared with a fifth last May.

Aviva's Working Lives report said that the continued financial squeeze on households is a "key obstacle" to retirement saving.

Almost half (45%) of workers who do not currently have a pension said they cannot afford to save into one and nearly one fifth of people said they did not have a pension because they were trying to pay down their debts.

More than half (55%) of employees said that a pay rise would help them to save more. However, one third (32%) of 700 employers surveyed are looking for alternative ways to motivate workers without "unduly increasing" their pay packets.

Automatic enrolment began last autumn with larger companies and around 10 million people will eventually be enrolled into schemes as the Government tackles the pension savings crisis.

However, Aviva found that there is still an awareness gap about auto-enrolment, with 87% of employers saying they know about the reforms compared with 59% of workers.

The report said that more must be done to drive home the benefits of pension saving, with face-to-face conversations and personalised planning.
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